Bitcoin linked to the now-defunct QuadrigaCX exchange has been identified to be on the move. The bitcoins which had been previously thought to be inaccessible were mysteriously moved out of multiple wallets, sparking speculations on who might have access to the wallets.
$1.7 Million Leave Dormant Addresses
The collapse of the QuadrigaCX exchange, Canada’s largest exchange at the time, saw a lot of users lose their money. While the majority of the losses were attributed to mismanagement by funder Gerald Cotten, a good portion of it was actually because the wallets of QuadrigaCX were said to be inaccessible as it was believed that he had taken the private keys to the grave with him after his death in 2018. However, much of what was believed has now been turned on its head as five wallets linked to the exchange were just activated after four years of inactivity.
This was uncovered by on-chain sleuth ZachXBT, who is notorious for exposing crypto scammers on his social media. Zach had flagged the wallets on Monday, presenting a total of five bitcoin wallets that had moved approximately 104 BTC, worth $1.7 million. All of the BTC had been moved during the weekend to different wallets.
The connection of these five wallets to QuadrigaCX was made back in 2019 by researchers who had been trying to determine which wallets Cotten had kept the coins in. This was further backed up by the lack of inactivity on these wallets since the founder died.
BTC jumps above $16,800 | Source: BTCUSD on TradingView.com
Where Did The Bitcoin Go?
As of now, the $1.7 million worth of bitcoin is sitting in unknown wallets. None of the coins was moved to centralized exchanges, meaning that there has been no attempt to sell them. However, the resurrection of these wallets has sparked the flame of speculation in regard to who could be moving the coins.
One of the most popular theories is that the coins were those that had been accidentally transferred to the cold wallets of Gerald Cotten. The amounts are very similar (around 103 BTC), but there are also other theories making the rounds.
Another theory was that it could be tied to the recovery efforts of Ernst & Young’s team who were in charge of fund recovery for the exchange, but a Quadriga creditor confirmed that E&Y was not behind the move, according to CoinDesk. Add in the fact that about half of the BTC was sent to a known crypto-mixing platform, Wasabi, and it is highly unlikely that E&Y is behind the move.
Customers of QuadrigaCX who lost almost $200 million when the crypto exchange collapsed are yet to be made whole. E&Y attributes this to the fact that Cotten was the only one with access to the wallets and as he did not keep any clear records, recovering the coins has proven difficult.
Featured image from Bloomberg, chart from TradingView.com